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Wednesday, August 3, 2011

Nintendo chief Satoru Iwata has apologized to early adopters of his company's 3DS portable for dropping its price so soon after launch.

"In the past, there have been price drops for video game systems some time after their release in order to broaden the user base further," Iwata wrote in a letter posted to his company's Web site and translated by Giant Bomb. "However, never before has Nintendo chosen to issue such a dramatic price drop less than 6 months after a system release."

According to Iwata (Google Translate page), the price drop was due to the company's desire to reassure "software creators and those on the retail side that are not confident that the Nintendo 3DS is a worthy successor to the DS and will achieve a similarly broad user base.
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Last week, Nintendo announced that it would drop the price of its 3DS worldwide. In the U.S., consumers will find the portable, which allows users to play games in 3D without the need for special glasses, on sale for $169.99 starting on August 12. The 3DS launched with a price tag of $249.99.

By dropping the 3DS price right now, Nintendo is risking upsetting early adopters that bought the portable at its higher price. And in Iwata's letter, he acknowledged that.

"We are all too keenly aware that those of you who supported us by purchasing the 3DS in the beginning may feel betrayed and criticize this decision," he wrote.

"Those customers who purchased the 3DS at the very beginning are extremely important to us," he continued. "We know that there is nothing we can do to completely make up for the feeling that you are being punished for buying the system early."

But Nintendo is going to try. The company has said that those who own a 3DS prior to the price drop and log on to the 3DS eShop before August 12 will receive 20 free games as part of its Ambassador Program. According to the company, 10 of the titles will come from its library of Virtual Console NES games, including Super Mario Bros. and The Legend of Zelda. The other 10 games will be Virtual Console Game Boy Advance titles, including Super Mario Advance 3 and Wario.

Offering freebies to customers following a quick price drop is by no means unprecedented, and in the past, has worked quite well for companies. One of the most notable examples was Apple's decision in 2007 to offer early adopters a $100 store credit after the company dropped the price of its original iPhone $200 just a couple months after it launched.

"Even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price," Apple CEO Steve Jobs Wrote at the time. "Our early customers trusted us, and we must live up to that trust with our actions in moments like these."

For Nintendo, there is a lot riding on the 3DS price drop, considering the portable's less-than-stellar sales record. During the company's first fiscal quarter ended June 30, Nintendo sold just 710,000 3DS units worldwide. In the U.S., the company sold only 110,000 3DS units during the period.

We have just announced a price drop for the Nintendo 3DS system effective on August 11 [August 12 in North America].

In the past, there have been price drops for video game systems some time after their release in order to broaden the user base further. However, never before has Nintendo chosen to issue such a dramatic price drop less than 6 months after a system release.

We are all too keenly aware that those of you who supported us by purchasing the 3DS in the beginning may feel betrayed and criticize this decision.

This unprecedented timing for a price cut is because the situation has changed greatly since we originally launched the 3DS. We decided it was necessary to take this drastic step in order to ensure that large numbers of users will continue to enjoy the 3DS in the future.

If the software creators and those on the retail side are not confident that the Nintendo 3DS is a worthy successor to the DS and will achieve a similarly broad (user) base, it will be impossible for the 3DS to gain popularity, acquire a wide range of software, and eventually create the product cycle necessary for everyone to be satisfied with the system.

Those customers who purchased the 3DS at the very beginning are extremely important to us. We know that there is nothing we can do to completely make up for the feeling that you are being punished for buying the system early. Still, we would like to offer the following as a sign of our appreciation to you.

[3DS Ambassador program details]

We feel a strong responsibility to develop the 3DS as a platform — to ensure that, in the end, everyone is satisfied; we will make every effort to do so.

Additionally, we know everyone is waiting for Super Mario 3D Land and Mario Kart 7. They are scheduled for release in November and December, respectively, so we ask for your patience until then.